The UK Government has pledged to invest up to £100m in hydrogen production using electrolysis, as part of its Net Zero Strategy, released today.
Around £140m will be made available within the new Industrial Decarbonisation and Hydrogen Revenue Support (IDHRS) scheme, which includes £100m that will award contracts of up to 250MW of electrolytic hydrogen production capacity in 2023, with further allocation in 2024.
The Net Zero Strategy stated the IDHRS scheme will bridge the gap between industrial energy costs from gas and hydrogen and will help “green hydrogen projects get off the ground”.
Net Zero Strategy sets out how the UK will deliver on its commitment to reach net zero emissions by 2050 and outlines measures to “transition to a green and sustainable future”.
The document reaffirms a previously announced goal of aiming to have all UK electricity supplies to come from low carbon sources by 2035.
This will be achieved, in part, by accelerating deployment of low-cost renewable generation, such as wind and solar, through the Contracts for Difference scheme and by undertaking a review of the frequency of these auctions, the document stated.
Morag Watson, director of policy at Scottish Renewables, said: “The commitment to accelerate the deployment of low-cost renewable generation, such as wind and solar through the Contracts for Difference (CfD) scheme by undertaking a review of the frequency of the CfD auctions is crucial to ensuring all our electricity comes from low-carbon sources by 2035.
“Commitments to support floating offshore wind, offshore supply chain and long duration storage will also support industry’s work to ensure maximum benefits to the UK economy and consumers as we transition to a renewables-based energy system.”
The strategy comes as the UK prepares to host the UN COP26 summit next week.
Other new funding commitments detailed in the strategy include an extra £350m on top of a £1bn commitment to support the electrification of UK vehicles and their supply chains, plus another £620m for targeted electric vehicle grants and infrastructure.
The policies and spending brought forward in the Net Zero Strategy mean that since the Ten Point Plan, the UK has mobilised £26bn of government capital investment for the “green industrial revolution”.
Business and energy secretary Kwasi Kwarteng said: “There is a global race to develop new green technology, kick-start new industries and attract private investment. The countries that capture the benefits of this global green industrial revolution will enjoy unrivalled growth and prosperity for decades to come – and it’s our job to ensure the UK is fighting fit.”
The government also stated that “through energy efficiency measures, falling costs of renewables and more, the measures in the strategy also mean people’s energy bills will be lower by 2024 than if no action was taken particularly as gas prices rise”.